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Developing Small Business in Kazakhstan
In ChevronTexaco's joint venture in Kazakhstan, Tengizchevroil (TCO), the Small Business Development (SBD) group is working to help develop and support small, locally owned companies in the country.
The SBD group was formed in 1997 and initially focused on funding community organizations or enterprises with social missions. In 2001, the group refocused its efforts to specifically target small businesses that could provide goods and services to TCO, although it still provides some community-benefit loans. Loans provided by the SBD group range in size from US$5,000 to US$750,000. Since it was formed, the SBD group has made 143 interest-free loans totaling nearly US$5.5 million, and has helped create more than 1,000 jobs.
Beyond simply providing the loans, the SBD group's four-person staff takes a hands-on role in working with loan recipients by providing technical or business assistance as appropriate, ensuring timely payments and helping identify and address any problems the companies encounter. The SBD group's goal is to see the businesses it helps develop to succeed and become self-sustaining.
Although the SBD loans play a relatively small part in helping TCO achieve its aggressive targets for buying from Kazakh providers, they are an important part of TCO's community economic development commitment. In 2002, TCO met its 37 percent local-content goal, spending more than US$415 million on Kazakh goods and services. TCO is on target to meet its 2004 goal of 39 percent local content.
Here are some success stories behind the SBD loans:
- Kazcomservice: The SBD group's initial loan of US$350,000 in 1999, followed by US$400,000 the following year, turned this four-person telecommunications cabling company into one of TCO's leading general-purpose contractors. Kazcomservice now employs more than 900 people in four locations around the country.
- AutoStroyService: To compete for TCO road repair work, AutoStroyService needed funding to upgrade its machinery. SBD's loan of US$150,000 provided the necessary equipment upgrades. The resulting increase in AutoStroyService's business allowed the company to repay the 36-month loan in less than 12 months.
- Olzha Co.: Olzha, a TCO primary contractor providing rail cars, maintenance and other transportation services, wanted to help develop a market for naturalgas-powered vehicles in Atyrau, Kazakhstan. The company received an initial US$300,000 loan from the SBD group. Olzha's plan, which includes a liquefied petroleum gas filling station and offloading rack, could provide healthy competition for the local monopoly. If Olzha meets specific mutually agreed-upon goals, it could receive another US$300,000 loan from the SBD group to further develop the business.
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